Here is the edited transcript of the interview on CNBC-TV18.
Q: Investor wants to invest Rs 1,000 per month and he wants to know how to allocate it. His time period is 5 years. His goal is Rs 12 lakh and he wants it for his child's education. He also has some insurance. It's an LIC Jeevan Aastha, sum assured of only Rs 50,000 and he is paying an annual premium of Rs 4,040 and he has got some investments in equities as well split between a lot of funds like Birla, HDFC Top 200 etc.
A: From what I understand of his investments is that he has got a large amount of money invested in equity mutual funds already, some 7-8 funds. I have two recommendations for him. Since he has so much in equities, I recommend that he park Rs 1,000 a month in gold, because he has a number of equity SIPs already going on. He doesn't need more exposure to equities.
In fact he needs to hedge his portfolio a little bit with gold. If he does any further SIPs they should also be into gold and debt. The second recommendation to him is to avoid some of the sector specific funds he has like the infrastructure funds and consolidate his 8 funds into maybe 3-4 funds.
Top Insurance Stocks To Buy Right Now: Cigna Corp (CI)
Cigna Corporation (Cigna), incorporated on November 3, 1981, is a holding company. Cigna is a global health service company, with insurance subsidiaries that are providers of medical, dental, disability, life and accident insurance and related products and services. In the United States, these products and services are offered through employers and other groups, and in selected international markets, Cigna offers supplemental health, life and accident insurance products and international health care coverage and services to businesses, governmental and non-governmental organizations and individuals. The Company also has certain run-off operations, including a Run-off Reinsurance segment. Cigna�� revenues are derived from premiums, fees, mail order pharmacy, other revenues and investment income. Cigna operates in five segments: Health Care, Disability and Life, International, Run-off Reinsurance, and Other Operations, including Corporate-owned Life Insurance. On January 31, 2012, Cigna acquired HealthSpring, Inc. On November 30, 2011, the Company acquired FirstAssist Group Holdings Limited. In August 2012, the Company acquired Great American Supplemental Benefits from American Financial Group, Inc. In January 2013, the Company acquired select Arcadian and Humana Medicare Advantage plans in Arkansas, Oklahoma and Texas. In September 2013, Cigna Corporation completed its acquisition of Alegis Care, a portfolio company of Triton Pacific Capital Partners. Effective September 3, 2013, Cigna Corp acquired Home Physicians Management LLC.
Health Care
Cigna�� Health Care segment (Cigna HealthCare) offers insured and self-insured medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services that may be integrated to provide health care benefit programs. Cigna HealthCare companies offer these products and services in all 50 states, the District of Columbia and the United States Virgin Islands. Cigna offers a ! range of products and services to employers and other groups that sponsor group health plans. With the exception of Health Maintenance Organization (HMO), Medicare, Voluntary and stop loss products, each of Cigna HealthCare�� products is offered with alternative funding options. Cigna may sell multiple products under the same funding arrangement to the same employer. Approximately 85% of the Company�� medical customers are enrolled in self-insured plans, with the remainder split between guaranteed cost and experience-rated insured plans. Approximately 90% of its medical customers are enrolled in self-insured and experience-rated plans. Cigna also offers guaranteed cost medical and dental insurance to individuals. Cigna HealthCare offers a product line of indemnity managed care benefit plans on an insured (guaranteed cost or experience-rated) or self-insured basis. The Network, Network Open Access, and Open Access Plus In-Network products cover only those services provided by Cigna HealthCare participating health care professionals (in-network) and emergency services provided by non-participating health care professionals (out-of-network). The Network point of service (POS), Network POS Open Access and Open Access Plus plans (OAP) cover health care services provided by participating, and non-participating health care professionals.
Cigna HealthCare offers a Preferred Provider Plans (PPO) product line that features a national network. Like Network and Open Access Plus Plans, the PPO product line is offered on an insured (guaranteed cost or experience-rated) or self-insured basis. Cigna HealthCare offers the Cigna Choice Fund suite of products, including Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA). Cigna HealthCare offers stop loss insurance coverage for self-insured plans. This stop loss coverage reimburses the plan for claims in excess of a predetermined amount, either for individuals (specific) or the entire group (aggregate), ! or both. ! Cigna HealthCare provides Taft-Hartley trusts and other entities access to its national provider network and provides claim re-pricing and other services. Cigna HealthCare�� voluntary medical products are offered to employers with 51 or more eligible employees. As a result of the acquisition of HealthSpring, Cigna operates Medicare Advantage coordinated care plans in 11 states and the District of Columbia. Under the Medicare program, Medicare-eligible beneficiaries may receive health care benefits, including prescription drugs, through a managed care health plan, such as the Company�� coordinated care plans, and The Centers for Medicare and Medicaid Services reimburse the Company pursuant to a risk adjustment payment methodology.
Cigna�� Medicare Part D prescription drug program, Cigna Medicare Rx, provides a number of plan options, as well as service and information support to Medicare and Medicaid eligible customers. Cigna Medicare Rx is available in all 50 states and the District of Columbia. Cigna HealthCare offers medical management, disease management, and other health advocacy services to employers and other plan sponsors. These services are offered to customers covered under Cigna HealthCare administered plans, as well as individuals covered under plans insured and/or administered by competing insurers/third-party administrators. Cigna�� onsite services include more than 75 health centers and the annual administration of more than 400,000 biometric screenings, as well as approximately 2,200 wellness seminars each year. As a result of the acquisition of HealthSpring, Cigna operates three LivingWell Health Centers, where Medicare customers can receive care from physicians, nurse practitioners, nurses, pharmacists, and nurses educators. Cigna arranges for behavioral health care services for customers through its network of participating behavioral health care professionals. Cigna offers behavioral health care case management services, employee assistance programs (EAP), and wor! k/life pr! ograms to employers, Government entities and other groups sponsoring health benefit plans. As of December 31, 2011, Cigna�� behavioral national network had approximately 108,000 access points to psychiatrists, psychologists and clinical social workers and approximately 9,000 facilities and clinics.
Cigna Pharmacy Management offers prescription drug plans to its insured and self-funded customers both in conjunction with its medical products and on a stand-alone basis. With a network of over 62,000 contracted pharmacies, Cigna Pharmacy Management is a pharmacy benefits manager (PBM) offering clinical integration programs, specialty pharmacy solutions and home delivery of prescription medicines. Cigna�� specialty pharmacy outcome management program, TheraCare, manages specialty conditions. TheraCare is coordinated with other Cigna health advocacy programs and all data is captured for analysis and reporting. Cigna Dental Health offers a variety of dental care products, including dental health maintenance organization plans (Dental HMO), dental preferred provider organization (DPPO) plans, dental exclusive provider organization plans, traditional dental indemnity plans and a dental discount program. As of December 31, 2011, Cigna Dental Health customers totaled approximately 10.9 million. Managed dental care products are offered in 38 states for Dental HMO and 43 states and the District of Columbia for Dental PPO through a network of independent health care professionals that have contracted with Cigna Dental Health to provide dental services. Cigna Dental Health customers access care from the dental PPO network in the United States and one of the dental HMO networks in the United States, with approximately 235,500 DPPO-contracted access points (approximately 92,000 health care professionals) and approximately 58,000 dental HMO-contracted access points (approximately 16,500 health care professionals).
Disability and Life
Cigna�� Disability and Life segment (Cign! a Disabil! ity and Life) provides insurance products and their related services, such as group long-term and short-term disability insurance, group life insurance and accident and specialty insurance. These products and services are provided by subsidiaries of Cigna Corporation. Cigna Disability and Life markets products in all 50 states, the District of Columbia, Puerto Rico, the United States Virgin Islands and Canada. Cigna Disability and Life also provides assistance to employees in returning to work and assistance to their employers in managing the cost of employee disability. Cigna Disability and Life offers personal accident insurance coverage, which consists primarily of accidental death and dismemberment and travel accident insurance to employers. Group accident insurance may be employer-paid or employee-paid. Cigna Disability and Life also offers specialty insurance services that consist primarily of disability and life, accident, and hospital indemnity products to professional or trade associations and financial institutions.
International
CIGNA�� International segment (CIGNA International) offers supplemental health, life and accident insurance products, as well as international health care products and services. These products and services are provided by subsidiaries of Cigna Corporation, including foreign operating entities. Cigna International provides employers, affinity groups and individuals with local and global health care and related financial protection programs. Supplemental health products provide a specified payment for a range of health risks and include personal accident, accidental death, critical illness, hospitalization, travel, dental, cancer and other dread disease coverages. Term life, as well as variable universal life insurance and other savings products are also included in the product portfolio. Cigna International�� supplemental health, life and accident insurance products are offered in South Korea, Taiwan, Indonesia, Hong Kong, the European Un! ion, Chin! a, New Zealand, Thailand and Turkey. In China, Cigna International owns a 50% interest in a joint venture through, which its products and services are offered. Cigna International�� health care businesses primarily consist of products and services to meet the needs of local and multinational companies and organizations and their local and globally mobile employees and dependents. These products and services include insurance and administrative services for medical, dental, vision, life, accidental death and dismemberment, and disability risks. In addition, Cigna International�� health care businesses include products and services, which are primarily provided through group benefits programs to employees of businesses and other organizations in the United Kingdom and Spain. These products and services include medical indemnity insurance coverage, with some offerings having managed care or administrative service aspects.
Run-off Reinsurance
Cigna�� reinsurance segment reinsured guaranteed minimum death benefits (GMDB) (also known as variable annuity death benefits (VADBe)), under certain variable annuities issued by other insurance companies. These variable annuities are investments in mutual funds combined with a death benefit. The Company purchased retrocessional protection that covers approximately 5% of the assumed risks. The Company also maintains a dynamic hedge program. Cigna also reinsured guaranteed minimum income benefits (GMIB) under certain variable annuities issued by other insurance companies. These variable annuities are investments in mutual funds combined with minimum income and death benefits. These products under Cigna�� Run-off Reinsurance segment were sold principally in North America and Europe through a sales force and through intermediaries.
Other Operations
The principal products of the Corporate-owned Life Insurance (COLI) business are permanent insurance contracts sold to corporations to provide coverage on the lives ! of certai! n employees for the purpose of funding employer-paid future benefit obligations. The principal services provided by the COLI business are issuance and administration of the insurance policies. COLI policies provide a death benefit for which Cigna collects fees to cover mortality risk. COLI policies also allow policy owners to borrow against a portion of their cash surrender value.
Advisors' Opinion:- [By guruek]
Weekly 52-week high companies: Cigna Corp (CI), Seadrill Ltd (SDRL), Harley-Davidson Inc. (HOG), Life Technologies Corp. (LIFE), and Vodafone Group PLC (VOD).
- [By Sean Williams]
For instance, what if many of the national health insurers choose not to participate in many of the state exchanges? In May, California unveiled the participants in its state-run exchange. Of the 13 health-benefits providers, notably absent was UnitedHealth Group (NYSE: UNH ) , Aetna (NYSE: AET ) , and CIGNA (NYSE: CI ) . Although these three insurers dominate the commercial side of the business and only maintain 7% of the cumulative individual insurance market in California, it seems rather ominous to me that they would pass on their chance to compete in California's huge patient pool. Furthermore, it points to the growing skepticism that many insurers (even the big ones) have about the upcoming implementation of Obamacare and the initiation of state exchanges.
- [By Sean Williams]
This is one of the primary reasons we witnessed WellPoint (NYSE: WLP ) and CIGNA (NYSE: CI ) jockeying for position in the Medicaid arena by purchasing AMERIGROUP and HealthSpring, respectively, in 2012 and 2011. Government-run health care may not provide the beefiest margins, but it's more than made up for with the sheer volume of new Medicaid patients expected to enter the system next year.
- [By Sean Williams]
For the insurers themselves, it would be a bit of a mixed bag. On one hand, the big three insurers that reached into their pockets and spent a fortune in the wake of Obamacare's passing --�WellPoint (NYSE: WLP ) with its purchase of Amerigroup, Cigna� (NYSE: CI ) with its purchase of HealthSpring, and Aetna (NYSE: AET ) buying Coventry Health Care -- will be left waiting even longer for their membership numbers to rise. No enforceable mandate means enrollment figures will only marginally move higher in a best-case scenario.
Top Insurance Stocks To Buy Right Now: Unum Group(UNM)
Unum Group, together with its subsidiaries, provides group and individual disability insurance products primarily in the United States and the United Kingdom. It also provides a portfolio of other insurance products, including employer-and employee-paid group benefits, life insurance, long-term care insurance, and related services. Its products include group long-term and short-term disability; group life and accidental death, and dismemberment; individual disability; group long-term care; voluntary benefits; group life; accident, sickness, and disability; and cancer and critical illness insurance products. The company also provides individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities. Unum Group markets its products primarily to employers interested in providing benefits to their employees. The company sells its products through field sales personnel, independent brokers, consultants, and agency sales force. Unum Group was founded in 1848 and is based in Chattanooga, Tennessee.
Advisors' Opinion:- [By Rich Duprey]
Specialty insurance provider�Unum (NYSE: UNM ) announced yesterday its third-quarter dividend of $0.145 per share, an 11% increase to the payout made last quarter of $0.13 per share.
Top 10 Financial Companies For 2014: CNO Financial Group Inc. (CNO)
CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.
Advisors' Opinion:- [By Jonas Elmerraji]
Up first is CNO Financial Group (CNO), a mid-cap financial stock that's rocketed close to 60% higher since the calendar flipped over to January. Yup, it's been a great year for the market, but it's been a far better one for investors who own CNO. But that strong performance isn't showing any signs of slowing yet. In fact, CNO looks primed for even more upside in the fourth quarter.
That's because CNO is currently forming a bullish pattern called an ascending triangle. The ascending triangle pattern is formed by a horizontal resistance level above shares -- in this case at $14.75 -- and uptrending support to the downside. Basically, as CNO bounces in between those two technical price levels, it's getting squeezed closer and closer to a breakout above that $14.75 resistance level. When that breakout happens, it's time to become a buyer.
ACCO's price action isn't exactly textbook. After all, the pattern is coming in at the bottom of a downtrend, not after an uptrend. But ultimately, that doesn't change the trading implications of a move through that $7.50 level.
Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Ascending triangles and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.
That $7.50 resistance level is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant. The move means that buyers are finally strong enough to absorb all of the excess supply above that price level.
Don't be early on this trade.
- [By David Fried, Editor, The Buyback Letter]
Insurance holding company CNO Financial Group (CNO) and its insurance subsidiaries��rincipally Bankers Life and Casualty Company, Washington National, and Colonial Penn Life Insurance Company��erve pre-retiree and retired Americans.
Top Insurance Stocks To Buy Right Now: MGIC Investment Corp (MTG)
MGIC Investment Corporation (MGIC), incorporated June 21, 1984, is a holding company and through wholly owned subsidiaries is a private mortgage insurer in the United States. As of December 31, 2012, its principal mortgage insurance subsidiaries, Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC), were each licensed in all 50 states of the United States, the District of Columbia and Puerto Rico. During the year ending December 31, 2012, the Company wrote new insurance in each of those jurisdictions in MGIC and/or MIC. The Company capitalized MIC to write new insurance in certain jurisdictions where MGIC no longer meets, and is unable to obtain a waiver of, those jurisdictions��minimum capital requirements. Private mortgage insurance covers losses from homeowner defaults on residential mortgage loans, reducing and, in some instances, eliminating the loss to the insured institution if the homeowner defaults.
Mortgage Insurance
Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure. Primary insurance is written on first mortgage loans secured by owner occupied single-family homes, which are one-to-four family homes and condominiums. Primary insurance is also written on first liens secured by non-owner occupied single-family homes, which are referred to in the home mortgage lending industry as investor loans, and on vacation or second homes. Primary coverage can be used on any type of residential mortgage loan instrument approved by the mortgage insurer.
When a borrower refinances a mortgage loan insured by the Company by paying it off in full with the proceeds of a new mortgage that is also insured by it, the insurance on that existing mortgage is cancelled, and insurance on the new mortgage is considered to be new primary insurance written. Therefore, continuation of its coverage fr! om a refinanced loan to a new loan results in both a cancellation of insurance and new insurance written. When a lender and borrower modify a loan rather than replace it with a new one, or enter into a new loan pursuant to a loan modification program, its insurance continues without being cancelled assuming that the Company consent to the modification or new loan.
The borrower�� mortgage loan instrument requires the borrower to pay the mortgage insurance premium. There are several payment plans available to the borrower, or lender, as the case may be. Under the monthly premium plan, the borrower or lender pays it a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to it in advance, and it earns and recognizes the premium over the next 12 months of coverage, with annual renewal premiums paid in advance thereafter and earned over the subsequent 12 months of coverage. Under the single premium plan, the borrower or lender pays it a single payment covering a specified term exceeding twelve months.
Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan, which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. In general, the loans insured by it in Wall Street bulk transactions consisted of loans with reduced underwriting documentation; cash out! refinanc! es, which exceed the standard underwriting requirements of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively GSEs); A- loans; subprime loans, and jumbo loans.
Other Products and Services
The Company has participated in risk sharing arrangements with the GSEs and captive mortgage reinsurance arrangements with subsidiaries of certain mortgage lenders, which reinsure a portion of the risk on loans originated or serviced by the lenders, which have MGIC primary insurance. It provides information regarding captive mortgage reinsurance arrangements to the New York Department of Insurance (known as the New York Department of Financial Services), the Minnesota Department of Commerce and the Department of Housing and Urban Development, (HUD). It performs contract underwriting services for lenders, in which it judges whether the data relating to the borrower and the loan contained in the lender�� mortgage loan application file comply with the lender�� loan underwriting guidelines. It also provides an interface to submit data to the automated underwriting systems of the GSEs, which independently judge the data. These services are provided for loans, which require private mortgage insurance, as well as for loans that do not require private mortgage insurance. It provides mortgage services for the mortgage finance industry, such as portfolio retention and secondary marketing of mortgages.
The Company competes with Federal Housing Administration, Veterans Administration, PMI Mortgage Insurance Company, Genworth Mortgage Insurance Corporation, United Guaranty Residential Insurance Company, Radian Guaranty Inc., CMG Mortgage Insurance Company, and Essent Guaranty, Inc.
Advisors' Opinion:- [By Jon C. Ogg]
MGIC Investment Corp. (NYSE: MTG) made the move to the Conviction Buy List on December 5, with a $10 price target. The company is benefiting from a solid improvement in credit and mortgage quality. With shares close to $8.40 now, the consensus price target is $8.81 and the 52-week trading range is $1.92 to $8.59. We noticed that the $10 price target is well under the street-high target of $13 on this stock.
- [By Dan Caplinger]
MGIC Investment (NYSE: MTG ) will release its quarterly report next Tuesday, but investors haven't waited for that report to send the stock to two-year highs. As the housing market has improved, the mortgage-insurance company's prospects have followed suit, but the slow recovery in MGIC earnings are now vulnerable to a potential drop in premium revenue if rising interest rates hurt new mortgage activity.
- [By David Hanson and Matt Koppenheffer]
In this segment of The Motley Fool's everything-financials show,�Where the Money Is, banking analysts Matt Koppenheffer and David Hanson dicuss earnings from MGIC Investment Corp. (NYSE: MTG ) and look ahead to Radian (NYSE: RDN ) 's (NYSE: RDN ) quarterly results.
- [By Ben Levisohn]
MGIC Investment (MTG) was not to supposed to turn a profit during the quarter. If the analysts were right, the mortgage insurer’s second-quarter profit was supposed to be a blip and MGIC would return to its money-losing ways.
Associated PressThat’s not quite what happened. MGIC reported a profit of 4 cents a share versus forecasts for a loss of 10 cents, according to FactSet and MGIC’s shares popped 14% to $8.29.
Its big day has also boosted other insurers. Radian Group (RDN) has risen 7.2% to $14.39, while Old Republic International (ORI) has advanced 2.1% to $15.24, Genworth Financial (GNW) is up 3.6% at $13.41 and MBIA Inc. (MBI) has jumped 4.3% to $10.76.
Susquehanna’s Jack Micenko credits a better economy with boosting earnings:
The beat was driven by lower loss reserving – $180 mln versus our estimate of $225 and the consensus estimate of $240, as favorable economic trends helped drive their default book claim rate and severity lower…
Micenko expects MGIC’s shares to hit $13, a 57% gain from its current price.
Top Insurance Stocks To Buy Right Now: Berkshire Hathaway Inc (BRKB.N)
Berkshire Hathaway Inc. (Berkshire) is a holding company owning subsidiaries engaged in a number of diverse business activities. The Company is engaged in insurance businesses conducted on both a primary basis and a reinsurance basis. Berkshire also owns and operates a number of other businesses engaged in a variety of activities. On December 30, 2011, Medical Protective Corporation (MedPro) completed the acquisition of 100% of the Princeton Insurance Company, a professional liability insurer for healthcare providers based in Princeton, New Jersey. During the year ended December 31, 2011, Acme Building Brands (Acme) acquired the assets of Jenkins Brick Company, the brick manufacturer in Alabama. In September 2011, Berkshire acquired The Lubrizol Corporation (Lubrizol). In June 2011, the Company acquired Wesco Financial Corporation. In June 2012, Media General, Inc. sold 63 daily and weekly newspapers to World Media Enterprises, Inc., a subsidiary of Berkshire. In July 2 012, Berkshire�� The Lubrizol Corporation acquired Lipotec SA.
Insurance and Reinsurance Businesses
Berkshire�� insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance entities. Berkshire�� insurance businesses provide insurance and reinsurance of property and casualty risks world-wide and also reinsure life, accident and health risks world-wide. Berkshire�� insurance underwriting operations are consisted of the sub-groups, including GEICO and its subsidiaries, General Re and its subsidiaries, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group. GEICO insurance subsidiaries include Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company and GEICO Casualty Company. These companies primarily offers private passenger automobile insurance to individuals in all 50 states and the District of Columbia. In addition, GEICO insures motorcycles, all-terrain vehicles, recreational vehicles a! n! d small commercial fleets and acts as an agent for other insurers who offer homeowners, boat and life insurance to individuals. GEICO markets its policies primarily through direct response methods in which applications for insurance are submitted directly to the companies through the Internet or by telephone.
General Re Corporation (General Re) is the holding company of General Reinsurance Corporation (GRC) and its subsidiaries and affiliates. GRC�� subsidiaries include General Reinsurance AG, a international reinsurer based in Germany. General Re subsidiaries conduct business activities globally in 51 cities and provide insurance and reinsurance coverages throughout the world. General Re provides property/casualty insurance and reinsurance, life/health reinsurance and other reinsurance intermediary and risk management, underwriting management and investment management services.
Property/Casualty Reinsurance
General Re�� property/c asualty reinsurance business in North America is conducted through GRC. Property/casualty operations in North America are also conducted through 16 branch offices in the United States and Canada. Reinsurance activities are marketed directly to clients without involving a broker or intermediary. General Re�� property/casualty business in North America also includes specialty insurers (primarily the General Star and Genesis companies domiciled in Connecticut and Ohio). These specialty insurers underwrite primarily liability and workers��compensation coverages on an excess and surplus basis and excess insurance for self-insured programs. General Re�� international property/casualty reinsurance business operations are conducted through internationally-based subsidiaries on a direct basis (through General Reinsurance AG, as well as several other General Re subsidiaries in 25 countries) and through brokers (primarily through Faraday, which owns the managing agent of Syndicat e 435 at Lloyd�� of London and provides capacity and ! parti! ci! pates i! n 100% of the results of Syndicate 435).
Life/Health Reinsurance
General Re�� North American and international life, health, long-term care and disability reinsurance coverages are written on an individual and group basis. Most of this business is written on a proportional treaty basis, with the exception of the United States group health and disability business which is predominately written on an excess treaty basis. Lesser amounts of life and disability business are written on a facultative basis. The life/health business is marketed on a direct basis. The Berkshire Hathaway Reinsurance Group (BHRG) operates from offices located in Stamford, Connecticut. Business activities are conducted through a group of subsidiary companies, led by National Indemnity Company (NICO) and Columbia Insurance Company (Columbia). BHRG provides principally excess and quota-share reinsurance to other property and casualty insurers and reinsurers. BHRG�� underwrit ing activities also include life reinsurance and life annuity business written through Berkshire Hathaway Life Insurance Company of Nebraska and financial guaranty insurance written through Berkshire Hathaway Assurance Corporation.
BHRG writes catastrophe excess-of-loss treaty reinsurance contracts. BHRG also writes individual policies for primarily large or otherwise unusual discrete risks on both an excess direct and facultative reinsurance basis, referred to as individual risk, which includes policies covering terrorism, natural catastrophe and aviation risks. A catastrophe excess policy provides protection to the counterparty from the accumulation of primarily property losses arising from a single loss event or series of related events. Catastrophe and individual risk policies may provide amounts of indemnification per contract and a single loss event may produce losses under a number of contracts. BHRG also underwrites traditional non-catastrophe insurance and reinsurance coverages, referred to as multi-li! ne proper! t! y/casualt! y business.
The Berkshire Hathaway Primary Group is a collection of primary insurance operations that provide a variety of insurance coverages to insureds located principally in the United States. NICO and certain affiliates underwrite motor vehicle and general liability insurance to commercial enterprises on both an admitted and excess and surplus basis. This business is written nationwide primarily through insurance agents and brokers and is based in Omaha, Nebraska. U.S. Investment Corporation (USIC), through its three subsidiaries led by United States Liability Insurance Company, is a specialty insurer that underwrites commercial, professional and personal lines of insurance on an admitted and excess and surplus basis. Policies are marketed in all 50 states and the District of Columbia through wholesale and retail insurance agents. USIC companies underwrite and market 109 distinct specialty property and casualty insurance products. Medical Protective Corpora tion (MedPro) is based in Fort Wayne, Indiana. Through its subsidiary, the Medical Protective Company, MedPro is engaged in primary medical professional liability coverage and risk solutions to physicians, dentists, other healthcare providers and healthcare facilities.
Railroad Business
Through BNSF Railway, BNSF operates a railroad network in North America with approximately 32,000 route miles of track (excluding multiple main tracks, yard tracks and sidings) in 28 states and two Canadian provinces as of December 31, 2011. BNSF owns approximately 23,000 route miles, including easements, and operates on approximately 9,000 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads��tracks. As of December 31, 2011, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings, consisted of approximately 50,000 operated miles of track, all of which are owned by or he ld under easement by BNSF except for approxi! mately 10! ,000 ro! ute miles! operated under trackage rights.
BNSF is based in Fort Worth, Texas, and through BNSF Railway Company operates railroad systems in North America. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Over half of the freight revenues of BNSF are covered by contractual agreements of varying durations. BNSF�� primary routes, including trackage rights, allow it to access cities and ports in the western and southern United States as well as parts of Canada and Mexico. In addition to cities and ports, BNSF efficiently serves many smaller mar kets by working closely with approximately 200 shortline partners. BNSF has also entered into marketing agreements with other rail carriers, expanding the marketing reach for each railroad and their customers.
Utilities and Energy Businesses
MidAmerican�� businesses are managed as separate operating units. MidAmerican�� domestic regulated energy interests are comprised of two regulated utility companies serving more than three million retail customers and two interstate natural gas pipeline companies with approximately 16,600 miles of pipeline and a design capacity of approximately 7.7 billion cubic feet of natural gas per day. Its United Kingdom electricity distribution subsidiaries serve about 3.9 million electricity end-users. In addition, MidAmerican�� interests include a diversified portfolio of domestic independent power projects, a hydroelectric facility in the Philippines and residential real estate brokerage firm in the United States .
PacifiCorp is a regulate! d electri! c utility co! mpany hea! dquartered in Oregon, serving regulated retail electric customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. The combined service territory�� diverse regional economy ranges from rural, agricultural and mining areas to urban, manufacturing and government service centers. As a vertically integrated electric utility, PacifiCorp owns approximately 10,600 net megawatts of generation capacity. MidAmerican Energy Company (MEC) is a regulated electric and natural gas utility company headquartered in Iowa, serving regulated retail electric and natural gas customers primarily in Iowa and also in portions of Illinois, South Dakota and Nebraska. MEC has a diverse customer base consisting of residential, agricultural and a variety of commercial and industrial customer groups. In addition to retail sales and natural gas transportation, MEC sells regulated electricity to markets operated by regional transmission organizations and regulated electricity and na tural gas to other utilities and market participants on a wholesale basis and sells non-regulated electricity and natural gas services in deregulated markets. As a vertically integrated electric and gas utility, MEC owns approximately 7,000 net megawatts of generation capacity.
The natural gas pipelines consist of Northern Natural Gas Company (Northern Natural) and Kern River Gas Transmission Company (Kern River). Northern Natural is based in Nebraska and owns interstate natural gas pipeline systems in the United States reaching from southern Texas to Michigan�� Upper Peninsula. Northern Natural�� pipeline system consists of approximately 14,900 miles of natural gas pipelines. Northern Natural has access to supplies from mid-continent basin and provides transportation services to utilities and numerous other customers. Northern Natural also operates three underground natural gas storage facilities and two liquefied natural gas storage peaking units.
Kern River is based in Utah ! and owns ! an interstate natu! ral gas p! ipeline system that consists of approximately 1,700 miles and extends from the supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern River transports natural gas for electric utilities and natural gas distribution utilities, oil and natural gas companies or affiliates of such companies, electricity generating companies, energy marketing and trading companies, and financial institutions. The United Kingdom utilities consist of Northern Powergrid (Northeast) Limited (Northern Powergrid (Northeast)) and Northern Powergrid (Yorkshire) plc (Northern Powergrid (Yorkshire)), which own a substantial United Kingdom electricity distribution network that delivers electricity to end-users in northeast England in an area covering approximately 10,000 square miles. The distribution companies primarily charge supply companies regulated tariffs for the use of electrical infrastructure. MidAmerican also owns HomeServices of America, Inc. (HomeServices) , a full-service residential real estate brokerage firm in the United States. HomeServices also offers integrated real estate services, including mortgage originations through a joint venture, title and closing services, property and casualty insurance, home warranties, relocation services and other home-related services. It operates under 22 residential real estate brand names with over 14,000 sales associates and in nearly 300 brokerage offices in 20 states.
Manufacturing, Service and Retailing Businesses
Berkshire�� numerous and diverse manufacturing, service and retailing businesses. Marmon consists of approximately 140 manufacturing and service businesses that operate independently within eleven diverse, stand-alone business sectors. These sectors are Building Wire, Crane Services, Distribution Services, Engineered Wire and Cable, Flow Products, Food Service Equipment, Highway Technologies, Industrial Products, Retail Store Fixtures, Transpo rtation Services and Engine! ered Prod! ucts and Water Treatment! .
Building Wire, providing copper electrical building wire for residential, commercial and industrial construction. Crane Services provides the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets. Distribution Services, supplying specialty metal pipe and tubing, bar and sheet products to markets including construction, industrial, aerospace and many others. Engineered Wire & Cable, providing electrical and electronic wire and cable for energy related markets and other industries. Flow Products is producing copper tube for the plumbing, heating, ventilation, and air conditioning (HVAC), refrigeration, and industrial markets. Food Service Equipment is supplying commercial food preparation equipment for restaurants and shopping carts for retail stores. Highway Technologies, primarily serving the heavy-duty highway transportation industry with trailers, fifth wheel coupling devices and undercarriage products such as brake parts an d suspension systems, and also serving the light vehicle aftermarket with clutches and related products.
Industrial Products, consisting of metal fasteners for the building, furniture, cabinetry, industrial and other markets, gloves for industrial markets, portable lighting equipment for mining and safety markets, overhead electrification equipment for mass transit systems, custom-machined brass, aluminum and copper forgings for the construction, valve and other industries, brass fittings and valves for commercial and industrial applications, and drawn aluminum tubing and extruded aluminum shapes for the construction, automotive, appliance, medical and other markets . Retail Store Fixtures, providing shelving and other merchandising displays and related services for retail stores worldwide. Transportation Services & Engineered Products, including manufacturing, leasing and maintenance of railroad tank cars, leasing of intermodal tank containers, in-plant rail s ervices, manufacturin! g of bi-m! odal railcar movers, wheel, ax! le and ge! ar sets for light rail transit and gear products for locomotives, manufacturing of steel tank heads, and services, equipment and technology for processing and distributing sulfur. Water Treatment, equipment including residential water softening, purification and refrigeration filtration systems, treatment systems for industrial markets including power generation, oil and gas, chemical, and pulp and paper, gear drives for irrigation systems and cooling towers, and air-cooled heat exchangers. Marmon operates approximately 300 manufacturing, distribution and service facilities that are primarily located in North America, Europe and China, and employs more than 16,000 people worldwide.
McLane Company, Inc. (McLane) provides wholesale distribution and logistics services in all 50 states and internationally in Brazil to customers that include discount retailers, convenience stores, wholesale clubs, quick service restaurants, drug stores and military bases. Operations are divided into five business units: grocery distribution, foodservice distribution, beverage distribution, international logistics and software development. McLane�� foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service restaurant industry. Operations are conducted through 18 facilities in 16 states. The foodservice distribution unit services more than 20,000 chain restaurants nationwide.
Other Manufacturing, Other Service and Retailing Businesses
Berkshire�� apparel manufacturing businesses include manufacturers of a variety of clothing and footwear. Businesses engaged in the manufacture and distribution of clothing products include Fruit of the Loom, Inc. (Fruit), Russell Brands, LLC (Russell), Vanity Fair Brands, LP (VFB), Garan and Fechheimer Brothers. Berkshire�� footwear businesses include H.H. Brown Shoe Group, Justin Brands and Brooks Athletic. Fruit, Russell and VFB (together FOL) is prima rily a verticall! y integra! ted manufacturer and distributor of! basic ap! parel, underwear and athletic apparel and products. Products, under the Fruit of the Loomand JERZEES labels are primarily sold in the mass merchandise and wholesale markets. In the VFB product line, Vassarette, Bestformand Curvationare sold in the mass merchandise market, while Vanity Fairand Lily of Franceproducts are sold in the mid-tier chains and department stores. FOL also markets and sells athletic uniforms, apparel, sports equipment and balls to team dealers; college licensed tee shirts and fleecewear to college bookstores and mid-tier merchants; and athletic apparel, sports equipment and balls to sporting goods retailers under the Russell Athleticand Spaldingbrands. Additionally, Spaldingmarkets and sells balls in the mass merchandise market and dollar store channel. During the year ended December, 31, 2011, approximately 30% of FOL�� sales were to Wal-Mart. FOL generally performs its own spinning, knitting, cloth finishing, cutting, sewing and packaging.
Garan designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademark Garanimalsand private labels of its customers. Garan also licenses its registered trademark Garanimalsto independent third parties. Garan conducts its business through operating subsidiaries located in the United States, Central America and Asia. Substantially all of Garan�� products are sold through its distribution centers in the United States to national chain stores, department stores and specialty stores. In 2011, over 90% of Garan�� sales were to Wal-Mart. Fechheimer Brothers manufactures, distributes and sells uniforms, principally for the public service and safety markets, including police, fire, postal and military markets. Fechheimer Brothers is based in Cincinnati, Ohio.
Justin Brands and H.H. Brown Shoe Group manufacture and distribute work, rugged outdoor and casual shoes and western-styl! e footwea! r under a number of brand names, includ! ing Justi! n, Tony Lama, Nocona, Chippewas, Born, Sofft, Carolina, Double-H Boots, Corcoran, Matterhornand Kork-Ease. Brooks Athletic markets and sells running footwear to specialty retailers under Brooksbrand. In 2011, Brooksachieved #1 market share in footwear with specialty retailers. A volume of the shoes sold by Berkshire�� shoe businesses are manufactured or purchased from sources outside the United States. Products are principally sold in the United States through a variety of channels including department stores, footwear chains, specialty stores, catalogs and the Internet, as well as through Company-owned retail stores.
Acme manufactures and distributes clay bricks (Acme Brickand Jenkins Brick), concrete block (Featherlite) and cut limestone (Texas Quarries). In addition, Acme distributes a number of other building products of other manufacturers, including glass block, floor and wall tile and other masonry products. Acme also sells ceramic floor and wall tile, as well as marble, granite and other stones through its subsidiary, American Tile and Stone. Products are sold primarily in the South Central and South Eastern United States through Company-operated sales offices. Acme distributes products primarily to homebuilders and masonry and general contractors.
Benjamin Moore & Co. (Benjamin Moore) is a formulator, manufacturer and retailer of a range of architectural coatings, available principally in the United States and Canada. Products include water-thinnable and solvent-thinnable general purpose coatings (paints, stains and clear finishes) for use by the general public, contractors and industrial and commercial users. Products are marketed under various registered brand names, including Regal, Superspec, Moorcraft, Moorgard, Aura, Nattura, ben, Coronado Paint, Insl-xand Lenmar.
Benjamin Moore and its manufacturing subsidiaries rely primarily on an independent dealer network for the distribution of it s produ! cts. Its ! distribution network includes approximately ! 100 Compa! ny-owned stores as well as over 4,500 third party retailers representing over 10,300 storefronts in the United States and Canada. Benjamin Moore�� Company-owned stores represent several multiple-outlet and stand-alone retailers in various parts of the United States and Canada serving primarily contractors and general consumers. The independent retailer channel offers an array of products including Benjamin Mooreand Insl-xbrands and other competitor coatings, wallcoverings, window treatments and sundries Benjamin Moore also has three color stations located in regional malls that serve as brand marketing tools. In addition to the independent retailer channel, Benjamin Moore has recently begun to sell direct to the consumer through e-commerce sites and its customer care program, which includes national accounts and government agencies.
Johns Manville (JM) is a manufacturer and marketer of products for building insulation, mechanical insulation, commercial roofi ng and roof insulation, as well as fibers and nonwovens for commercial, industrial and residential applications. JM serves markets that include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe and equipment filtration, waterproofing, building, flooring, interiors and wind energy. Fiber glass is the basic material in a majority of JM�� products, although JM also manufactures a portion of its products with other materials to satisfy the broader needs of its customers. JM regards its patents and licenses as valuable, however it does not consider any of its businesses to be materially dependent on any single patent or license. JM is headquartered in Denver, Colorado, and operates 40 manufacturing facilities in North America, Europe and China and conducts research and development at several other facilities. JM sells its products through a variety of channels, including contractors, distributors, retailers, manufacturers and fabricators.
The Shaw Industries Group, Inc. (Shaw) is a carpet manufacturer based on both revenue and volume o f production. Shaw designs and manufactures over 3,000 styles of tufted carpet, tufted and woven rugs, laminate and wood flooring for residential and commercial use under about 30 brand and trade names and under certain private labels. Shaw also provides installation services and sells ceramic and vinyl tile along with sheet vinyl. Shaw�� manufacturing operations are fully integrated from the processing of raw materials used to make fiber through the finishing of carpet. Shaw�� carpet, rugs and hard surface products are sold in a broad range of prices, patterns, colors and textures.
Shaw products are sold wholesale to over 40,000 retailers, distributors and commercial users throughout the United States, Canada and Mexico and are also exported to various overseas markets. Shaw�� wholesale products are marketed domestically by over 2,000 salaried and commissioned sales personnel directly to retailers and distributors and to national accounts. Shaw�� 10 ! car pet f! ull-service distribution facilities, three hard surface! and two ! rug full-service distribution facilities and 24 redistribution centers, along with centralized management information systems, enable it to provide prompt efficient delivery of its products to both its retail customers and wholesale distributors.
Berkshire acquired an 80% interest in IMC International Metalworking Companies B.V. (IMC B.V.). Through its subsidiaries, IMC B.V. is a multinational manufacturers of consumable precision carbide metal cutting tools for applications in a range of industrial end markets under the brand names ISCAR, TaeguTec, Ingersoll, Tungaloy, Unitac, UOP It.te.diand Outiltec. IMC B.V.�� manufacturing facilities are located in Israel, United States, Germany, Italy, France, Switzerland, South Korea, China, India, Japan and Brazil. IMC B.V. has five primary product lines: milling tools, gripping tools, turning/thread tools, drilling tools and tooling. Forest River, Inc. (Forest River) is a manufacturer of recreational vehicles, utilit y, cargo and office trailers, buses and pontoon boats, headquartered in Elkhart, Indiana. Its products are sold in the United States and Canada through an independent dealer network.
Scott Fetzer companies are a diversified group of 20 businesses that manufacture and distribute a variety of products for residential, industrial and institutional use. The two of these businesses are Kirby home cleaning systems and Campbell Hausfeld products. Albecca Inc. (Albecca), headquartered in Norcross, Georgia, does business primarily under the Larson-Juhlname. Albecca designs, manufactures and distributes a complete line of branded custom framing products, including wood and metal moulding, matboard, foamboard, glass, equipment and other framing supplies in the United States, Canada and 15 countries outside of North America. CTB International Corp. is a designer, manufacturer and marketer of systems used in the grain industry and in the production of poultry, hogs a! nd eggs. !
Lubrizol is a specialty chemical company that ! produces ! and supplies technologies for the global transportation, industrial and consumer markets. Lubrizol operates two business sectors: Lubrizol Additives, which includes engine, driveline and industrial additive products and Lubrizol Advanced Materials, which includes personal and home care, engineered polymer and performance coating products. FlightSafety International Inc.(FlightSafety) is engaged primarily in the business of providing high technology training to operators of aircraft. FlightSafety�� training activities include advanced training for pilots of business and commercial aircraft; aircrew training for military and other government personnel; aircraft maintenance technician training; flight attendant and aircraft dispatcher training, and ab-initio (primary) pilot training to qualify individuals for private and commercial pilots��licenses. FlightSafety also develops classroom instructional systems and materials for use in its training business and for sale to othe rs.
NetJets Inc. (NJ) is a provider of fractional ownership programs for general aviation aircraft. TTI, Inc. (TTI) is a global specialty distributor of passive, interconnect, electromechanical and discrete components used by customers in the manufacturing and assembling of electronic products. Business Wire provides electronic dissemination of full-text news releases daily to the media, online services and databases and the global investment community in 150 countries and 45 languages. Berkshire�� retailing businesses principally consist of several independently managed home furnishings and jewelry operations. The home furnishings businesses are the Nebraska Furniture Mart (NFM), R.C. Willey Home Furnishings (R.C. Willey), Star Furniture Company (Star) and Jordan�� Furniture, Inc. (Jordan��). NFM, R.C. Willey, Star and Jordan�� each offer a wide selection of furniture, bedding and accessories. In addition, NFM and R.C. Willey sell a line ! of househ! old a ppliances, electronics, computers and other home furnishings! . NFM, R.! C. Willey, Star and Jordan�� also offer customer financing to complement their retail operations. An important feature of each of these businesses is their ability to control costs and to produce high business volume by offering value to their customers.
NFM operates its business from two retail complexes with almost one million square feet of retail space and sizable warehouse and administrative facilities in Omaha, Nebraska and Kansas City, Kansas. NFM is a furniture retailer in each of its markets. NFM also owns Homemakers Furniture located in Des Moines, Iowa, which has approximately 215,000 square feet of retail space. R.C. Willey, based in Salt Lake City, Utah, is a home furnishings retailer in the Intermountain West region of the United States. R.C. Willey operates 11 retail stores, two retail clearance facilities and three distribution centers. Borsheim Jewelry Company, Inc. (Borsheims) operates from a single store located in Omaha, Nebraska. Borsheim s is a high volume retailer of jewelry, watches, crystal, china, stemware, flatware, gifts and collectibles. Helzberg�� Diamond Shops, Inc. (Helzberg), based in North Kansas City, Missouri, operates a chain of 233 retail jewelry stores in 37 states, which includes approximately 550,000 square feet of retail space. Most of Helzberg�� stores are located in malls, lifestyle centers or power strip centers, and all stores operate under the name Helzberg Diamonds. The Ben Bridge Corporation (Ben Bridge Jeweler), based in Seattle, Washington, operates a chain of 70 upscale retail jewelry stores located in 11 states that are primarily in the Western United States. Three of its locations are concept stores that sell only PANDORA jewelry.
Finance and Financial Products
Clayton Homes, Inc. (Clayton) is a vertically integrated manufactured housing company. At December 31, 2011, Clayton operated 33 manufacturing plants in 12 states. Clay! ton�� h! omes are ma rketed in 48 states through a network of 1,333 retailers, in! cluding 3! 33 Company-owned home centers. Financing is offered through its finance subsidiaries to purchasers of Clayton�� manufactured homes as well as those purchasing homes from selected independent retailers. XTRA Corporation (XTRA), headquartered in St. Louis, Missouri, is a transportation equipment lessor operating under the XTRA Leasebrand name. XTRA manages a diverse fleet of approximately 83,000 units located at 63 facilities throughout the United States and two facilities in Canada. The fleet includes over-the-road and storage traile
Top Insurance Stocks To Buy Right Now: Fairfax Financial Holdings Ltd (FRFHF)
Fairfax Financial Holdings Limited (Fairfax) is a financial services holding company. The Company, through its subsidiaries, is principally engaged in property and casualty insurance and reinsurance and the associated investment management. The Company�� segments consist of Insurance, Reinsurance, Insurance and Reinsurance Other, Runoff, and Corporate and Other. On December 22, 2011, the Company completed the acquisition of 75% interests in Sporting Life Inc. On August 16, 2011, the Company acquired William Ashley China Corporation. On March 24, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of The Pacific Insurance Berhad. On February 9, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of First Mercury Financial Corporation. In October 2012, its RiverStone runoff subsidiary acquired all the outstanding shares of Brit Insurance Limited. Advisors' Opinion:- [By Dan Caplinger]
That business model has been so successful that other, smaller insurance companies have emulated it. For instance, Fairfax Financial (NASDAQOTH: FRFHF ) and Markel (NYSE: MKL ) have used the same investing model to take advantage of their respective core insurance businesses. Both Fairfax and Markel have had substantial success, showing the power of using temporarily available premium reserves to make higher-return investments.
Top Insurance Stocks To Buy Right Now: Berkshire Hathaway Inc (BRKB)
Berkshire Hathaway Inc. (Berkshire), incorporated on June 16, 1998, is a holding company owning subsidiaries engaged in a number of diverse business activities. The Company is engaged in the insurance businesses conducted on both a primary basis and a reinsurance basis, a freight rail transportation business and a group of utility, and energy generation and distribution businesses. Berkshire also owns and operates a number of other businesses engaged in a variety of activities. In October 2012, HomeServices acquired a 66.7% interest in the residential real estate brokerage franchise network in the United States. In May 2013, Berkshire acquired the remaining 20% stake in IMC International Metalworking Companies BV.
Insurance and Reinsurance Businesses
Berkshire�� insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance entities. Berkshire�� insurance businesses provide insurance and reinsurance of property and casualty risks worldwide and also reinsure life, accident and health risks worldwide. The Company�� insurance underwriting operations are consisted of the sub-groups, including GEICO and its subsidiaries, General Re and its subsidiaries, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group. GEICO insurance subsidiaries include Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, GEICO Casualty Company, GEICO Advantage Insurance Company, GEICO Choice Insurance Company and GEICO Secure Insurance Company. These companies primarily offers private passenger automobile insurance to individuals in all 50 states and the District of Columbia. In addition, GEICO insures motorcycles, all-terrain vehicles, recreational vehicles and small commercial fleets and acts as an agent for other insurers who offer homeowners, boat and life insurance to individuals. GEICO markets its policies primarily through direct response methods in which applications for insura! nce are submitted directly to the companies via the Internet or by telephone.
General Re Corporation (General Re) is the holding company of General Reinsurance Corporation (GRC) and its subsidiaries and affiliates. GRC�� subsidiaries include General Reinsurance AG, an international reinsurer based in Germany. General Re subsidiaries conduct business activities globally in 51 cities and provide insurance and reinsurance coverages throughout the world. General Re provides property/casualty insurance and reinsurance, life/health reinsurance and other reinsurance intermediary and risk management, underwriting management and investment management services.
Property/Casualty Reinsurance
General Re�� property/casualty reinsurance business in North America is conducted through GRC. Property/casualty operations in North America are also conducted through 16 branch offices in the United States and Canada. Reinsurance activities are marketed directly to clients without involving a broker or intermediary. General Re�� property/casualty business in North America also includes specialty insurers (primarily the General Star and Genesis companies). These specialty insurers underwrite primarily liability and workers��compensation coverages on an excess and surplus basis and excess insurance for self-insured programs. General Re�� international property/casualty reinsurance business operations are conducted through internationally-based subsidiaries on a direct basis (through General Reinsurance AG, as well as several other General Re subsidiaries in 23 countries) and through brokers (primarily through Faraday, which owns the managing agent of Syndicate 435 at Lloyd�� of London and provides capacity and participates in 100% of the results of Syndicate 435).
Life/Health Reinsurance
General Re�� North American and international life, health, long-term care and disability reinsurance coverages are written on an individual and group basis. Most! of this ! business is written on a proportional treaty basis, with the exception of the United States group health and disability business, which is predominately written on an excess treaty basis. Lesser amounts of life and disability business are written on a facultative basis. The life/health business is marketed on a direct basis.
The Berkshire Hathaway Reinsurance Group (BHRG) operates from offices located in Stamford, Connecticut. Business activities are conducted through a group of subsidiary companies, led by National Indemnity Company (NICO) and Columbia Insurance Company (Columbia). BHRG provides principally excess and quota-share reinsurance to other property and casualty insurers and reinsurers. BHRG�� underwriting activities also include life reinsurance and life annuity business written through Berkshire Hathaway Life Insurance Company of Nebraska and financial guaranty insurance written through Berkshire Hathaway Assurance Corporation.
BHRG writes catastrophe excess-of-loss treaty reinsurance contracts. BHRG also writes individual policies for primarily large or otherwise unusual discrete risks on both an excess direct and facultative reinsurance basis, referred to as individual risk, which includes policies covering terrorism, natural catastrophe and aviation risks. A catastrophe excess policy provides protection to the counterparty from the accumulation of primarily property losses arising from a single loss event or series of related events. Catastrophe and individual risk policies may provide amounts of indemnification per contract and a single loss event may produce losses under a number of contracts. BHRG also underwrites traditional non-catastrophe insurance and reinsurance coverages, referred to as multi-line property/casualty business.
The Berkshire Hathaway Primary Group is a collection of primary insurance operations that provide a range of insurance coverages to insureds located principally in the United States. NICO and certain affiliates underw! rite moto! r vehicle and general liability insurance to commercial enterprises on both an admitted and excess and surplus basis. This business is written nationwide primarily through insurance agents and brokers and is based in Omaha, Nebraska. U.S. Investment Corporation (USIC), through its four subsidiaries led by United States Liability Insurance Company, is a specialty insurer that underwrites commercial, professional and personal lines of insurance on an admitted and excess and surplus basis. Policies are marketed in all 50 states and the District of Columbia through wholesale and retail insurance agents. USIC companies underwrite and market 110 distinct specialty property and casualty insurance products. Medical Protective Corporation (MedPro) is based in Fort Wayne, Indiana. MedPro offers products and solutions through its subsidiaries, The Medical Protective Company and Princeton Insurance Company and is a primary healthcare malpractice insurance coverage and patient safety solutions to physicians, dentists, other healthcare providers and healthcare facilities. Other insurance operations include the Berkshire Hathaway Homestate Companies (BHHC), a group of six insurance companies that primarily offers standalone workers��compensation, commercial auto and commercial property coverages.
Railroad Business
Through Burlington Northern Santa Fe, LLC (BNSF) Railway, BNSF operates a railroad network in North America with approximately BNSF operates a railroad network in North America with approximately 32,500 route miles of track (excluding multiple main tracks, yard tracks and sidings) in 28 states and two Canadian provinces as of December 31, 2012. BNSF owns approximately 23,000 route miles, including easements, and operates on approximately 9,500 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads��tracks. As of December 31, 2012, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings,! consiste! d of approximately 50,500 operated miles of track, all of which are owned by or held under easement by BNSF except for approximately 10,500 miles operated under trackage rights.
BNSF is based in Fort Worth, Texas, and through BNSF Railway Company operates railroad systems in North America. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Over half of the freight revenues of BNSF are covered by contractual agreements of varying durations. BNSF�� primary routes, including trackage rights, allow it to access major cities and ports in the western and southern United States, as well as parts of Canada and Mexico.
Utilities and Energy Businesses
MidAmerican�� businesses are managed as separate operating units. MidAmerican�� domestic regulated energy interests are consisted of two regulated utility companies serving more than three million retail customers, two interstate natural gas pipeline companies with approximately 16,600 miles of pipeline and a design capacity of approximately 7.7 billion cubic feet of natural gas per day and a 50% interest in electric transmission businesses. Its Great Britain electricity distribution subsidiaries serve about 3.9 million electricity end-users. In addition, MidAmerican�� interests include a diversified portfolio of domestic independent power projects, a hydroelectric facility in the Philippines, the residential real estate brokerage firm in the United States and the residential real estate brokerage franchise network in the United States.
PacifiCorp is a regulated electric utility company, serving regulated retail electric customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. The combined service territory�� diverse regional economy ranges from rural, agricultural and mining areas to urban,! manufact! uring and government service centers. As a vertically integrated electric utility, PacifiCorp owns approximately 10,600 net megawatts (MW) of generation capacity.
MidAmerican Energy Company (MEC) is a regulated electric and natural gas utility company, serving regulated retail electric and natural gas customers primarily in Iowa and also in portions of Illinois, South Dakota and Nebraska. MEC has a diverse customer base consisting of urban and rural residential customers and a range of commercial and industrial customers. In addition to retail sales and natural gas transportation, MEC sells regulated electricity principally to markets operated by regional transmission organizations and regulated natural gas to other utilities and market participants on a wholesale basis and sells non-regulated electricity and natural gas services in deregulated markets. As a vertically integrated electric and gas utility, MEC owns approximately 7,400 net megawatts of generation capacity.
The natural gas pipelines consist of Northern Natural Gas Company (Northern Natural) and Kern River Gas Transmission Company (Kern River). Northern Natural is based in Nebraska and owns interstate natural gas pipeline system in the United States reaching from southern Texas to Michigan�� Upper Peninsula. Northern Natural�� pipeline system consists of approximately 14,900 miles of natural gas pipelines. Northern Natural also operates three underground natural gas storage facilities and two liquefied natural gas storage peaking units.
Kern River is based in Utah and owns an interstate natural gas pipeline system that consists of approximately 1,700 miles and extends from supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern River transports natural gas for electric utilities and natural gas distribution utilities, major oil and natural gas companies or affiliates of such companies, electricity generating companies, energy marketing and trading companies, a! nd financ! ial institutions. The Great Britain utilities consist of Northern Powergrid (Northeast) Limited (Northern Powergrid (Northeast)) and Northern Powergrid (Yorkshire) plc (Northern Powergrid (Yorkshire)), which own a substantial Great Britain electricity distribution network that delivers electricity to end-users in northeast England in an area covering approximately 10,000 square miles. The distribution companies primarily charge supply companies regulated tariffs for the use of electrical infrastructure. MidAmerican also owns HomeServices of America, Inc. (HomeServices), a full-service residential real estate brokerage firm in the United States. HomeServices offers integrated real estate services, including mortgage originations and mortgage banking primarily through joint ventures, title and closing services, property and casualty insurance, home warranties, relocation services and other home-related services. It operates under 27 residential real estate brand names with over 16,000 sales agents and in nearly 375 brokerage offices in 21 states.
Manufacturing, Service and Retailing Businesses
Berkshire�� numerous and diverse manufacturing, service and retailing businesses. Marmon Holdings, Inc. (Marmon) consists of approximately 140 manufacturing and service businesses that operate independently within 11 diverse business sectors. These sectors are distribution services, electrical and plumbing products, industrial products, crane services, engineered wire and cable, transportation services and engineered products, food service equipment, highway technologies, retail home improvement products, retail store fixtures, and water treatment.
Distribution Services supplies specialty metal pipe and tubing, bar and sheet products to markets, including construction, industrial, aerospace and many others. Electrical and Plumbing Products is engaged in the distribution, supplying electrical building wire primarily for residential and commercial construction, and copper tube for th! e plumbin! g, heating, ventilation, and air conditioning (HVAC), refrigeration and industrial markets, through the wholesale channel. Industrial Products consists of metal fasteners and fastener coatings for the construction, industrial and other markets, gloves for industrial markets, portable lighting equipment for mining and safety markets, overhead electrification equipment for mass transit systems, custom-machined aluminum and brass forgings for the construction, energy, recreation and other industries, brass fittings and valves for commercial and industrial applications, and drawn aluminum tubing and extruded aluminum shapes for the construction, automotive, appliance, medical and other markets.
Crane Services is engaged in providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets. Engineered Wire and Cable is engaged in supplying electrical and electronic wire and cable for energy related markets and other industries. Transportation Services and Engineered Products includes manufacturing, leasing and maintenance of railroad tank cars, leasing of intermodal tank containers, in-plant rail services, manufacturing of bi-modal railcar movers, wheel, axle and gear sets for light rail transit and gear products for locomotives, manufacturing of steel tank heads, and services, equipment and technology for processing and distributing sulfur.
Food Service Equipment is engaged in supplying commercial food preparation equipment for restaurants and shopping carts for retail stores. Highway Technologies primarily serve the heavy-duty highway transportation industry with trailers, fifth wheel coupling devices and undercarriage products, such as brake parts and suspension systems, and also serving the light vehicle aftermarket with clutches and related products. Retail Home Improvement Products is engaged in supplying electrical and plumbing products through the home center channel. Retail Store Fixtures provides shelving systems, other merchandising di! splays an! d related services for retail stores, as well as work and garden gloves sold at retail. Water Treatment includes residential water softening, purification and refrigeration filtration systems, treatment systems for industrial markets including power generation, oil and gas, chemical, and pulp and paper, gear drives for irrigation systems and cooling towers, and air-cooled heat exchangers.
McLane Company, Inc. (McLane) provides wholesale distribution and logistics services in all 50 states and internationally in Brazil to customers that include convenience stores, discount retailers, wholesale clubs, drug stores, military bases, quick service restaurants and casual dining restaurants. Operations include grocery distribution, foodservice distribution, beverage distribution, international logistics and software development. McLane�� foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service restaurant industry. Operations are conducted through 18 facilities in 16 states. The foodservice distribution unit services more than 19,000 chain restaurants nationwide.
Other Manufacturing, Other Service and Retailing Businesses
Berkshire�� apparel manufacturing businesses include manufacturers of a range of clothing and footwear. Businesses engaged in the manufacture and distribution of clothing products include Fruit of the Loom, Inc. (Fruit), Russell Brands, LLC (Russell), Vanity Fair Brands, LP (VFB), Garan and Fechheimer Brothers. Berkshire�� footwear businesses include H.H. Brown Shoe Group, Justin Brands and Brooks Sports. Fruit, Russell and VFB (together FOL) is primarily a vertically integrated manufacturer and distributor of basic apparel, underwear and athletic apparel and products. Products, under the Fruit of the Loom and JERZEES labels are primarily sold in the mass merchandise and wholesale markets. In the VFB product line, Vassarette, Bestform and Curvation are sold in the mass merchandise market, while Vanity Fair and! Lily of ! France products are sold in the mid-tier chains and department stores. FOL also markets and sells athletic uniforms, apparel, sports equipment and balls to team dealers; college licensed tee shirts and fleecewear to college bookstores and mid-tier merchants; and athletic apparel, sports equipment and balls to sporting goods retailers under the Russell Athletic and Spalding brands. Additionally, Spalding markets and sells balls in the mass merchandise market and dollar store channels.
Garan designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademark Garanimals and private labels of its customers. Garan also licenses its registered trademark Garanimals to independent third parties. Garan conducts its business through operating subsidiaries located in the United States, Central America and Asia. Fechheimer Brothers manufactures, distributes and sells uniforms, principally for the public service and safety markets, including police, fire, postal and military markets. Fechheimer Brothers is based in Cincinnati, Ohio.
Justin Brands and H.H. Brown Shoe Group manufacture and distribute work, rugged outdoor and casual shoes and western-style footwear under a number of brand names, including Justin, Tony Lama, Nocona, Chippewa, Carolina, Sofft, Double-H Boots, Eurosoft, and Softspots. Acme Building Brands (Acme) manufactures and distributes clay bricks (Acme Brick and Jenkins Brick), concrete block (Featherlite) and cut limestone (Texas Quarries). In addition, Acme distributes a range of other building products of other manufacturers, including glass block, floor and wall tile, wood flooring and other masonry products. Acme also sells ceramic floor and wall tile, as well as marble, granite and other stones through its subsidiary, American Tile and Stone. Benjamin Moore & Co. (Benjamin Moore) is a formulator, manufacturer and retailer of a range of architectural coatings, available principa! lly in th! e United States and Canada. Products include water-thinnable and solvent-thinnable general purpose coatings (paints, stains and clear finishes) for use by the general public, contractors and industrial and commercial users. Products are marketed under various registered brand names, including Regal, Super Spec, MoorGard, Aura, Nattura, ben, Coronado, Insl-x and Lenmar.
Johns Manville (JM) is a manufacturer and marketer of products for building insulation, mechanical insulation, commercial roofing and roof insulation, as well as fibers and nonwovens for commercial, industrial and residential applications. JM serves markets that include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe insulation, filtration, waterproofing, building, flooring, interiors and wind energy. The Shaw Industries Group, Inc. (Shaw) is a carpet manufacturer based on both revenue and volume of production. Shaw designs and manufactures over 3,000 styles of tufted carpet, tufted and woven rugs, laminate and wood flooring for residential and commercial use under about 30 brand and trade names and under certain private labels. Shaw also provides installation services and sells ceramic and vinyl tile along with sheet vinyl. Forest River, Inc. (Forest River) is a manufacturer of recreational vehicles, utility, cargo and office trailers, buses and pontoon boats. Albecca Inc. (Albecca) does business primarily under the Larson-Juhl name. Albecca designs, manufactures and distributes a range of products, including wood and metal molding, matboard, foamboard, glass, equipment and other framing supplies in the United States, Canada and 15 countries outside of North America.
FlightSafety International Inc. (FSI) is engaged in professional aviation training services to individuals, businesses (including certain commercial aviation companies) and the United States. Government. FSI primarily provides training to pilots, aircraft maintenance technicians, flight attendants and dispatchers who op! erate and! support a range of business, commercial and military aircraft. NetJets Inc. (NJ) is a provider of fractional ownership programs for general aviation aircraft. TTI, Inc. (TTI) is a specialty distributor of passive, interconnect, electromechanical and discrete components used by customers in the manufacturing and assembling of electronic products. TTI�� customer base includes original equipment manufacturers, electronic manufacturing services, original design manufacturers, military and commercial customers, as well as design and system engineers. TTI services a range of industries, including telecommunications, medical devices, computers and office equipment, aerospace, automotive and consumer electronics.
Finance and Financial Products
The Company�� finance and financial products businesses include manufactured housing and finance (Clayton Homes), transportation equipment leasing (XTRA), furniture leasing (CORT), as well as various miscellaneous financing activities. Clayton Homes, Inc. (Clayton) is a vertically integrated manufactured housing company. As of December 31, 2012, Clayton operated 34 manufacturing plants in 12 states. Clayton�� homes are marketed in 48 states through a network of 1,441 retailers, including 323 company-owned home centers. XTRA is a transportation equipment lessor operating under the XTRA Lease brand name. XTRA manages a diverse fleet of approximately 82,000 units located at 58 facilities throughout the United States and two facilities in Canada. The fleet includes over-the-road and storage trailers, chassis, temperature controlled vans and flatbed trailers. CORT Business Services Corporation is a provider of rental relocation services, including rental furniture, accessories and related services in the rent-to-rent segment of the furniture rental industry.
Advisors' Opinion:- [By WALLSTCHEATSHEET.COM]
Berkshire Hathaway is an investment manager with a variety of investments in a number of industries. It is being reported that the company made significant gains from investments during the Financial Crisis. The stock has been flying higher in recent years and is now consolidating near all time high prices. Over the last four quarters, earnings and revenues have been rising. Relative to its peers and sector, Berkshire Hathaway �has been an average year-to-date performer. Look for Berkshire Hathaway to OUTPERFORM.
- [By Tiernan Ray]
Berkshire Hathaway�(BRKB) this afternoon reported Q2 operating earnings per Class-A share of $2,384, up 6% from the year-earlier period, and topping a consensus for $2,163 according to FactSet.
The company’s book value per share rose 7.6% from the beginning of the year to $122,900.
The company saw a $322 million gain on investments, better than the prior-year’s $81 million gain, and a $300 million gain on derivatives, versus a year-earlier $693 million loss.
Total revenue for the company from all its holdings was up 16% at $44.69 billion.
Total assets rose to $446.56 billion from $427.45 billion a year earlier.
The full federal filing for the quarter is available on the company’s Web site.
In the filing,�Warren Buffett and his team outlined gains in the underwriting business, railroads, and energy, with a “mixed” bag of results for manufacturing, services and retail:
Our insurance businesses generated significant underwriting gains in the first six months of 2013 and 2012. Our railroad and utilities and energy businesses continued to generate significant earnings in 2013. Earnings from our manufacturing, service and retailing businesses in 2013 were mixed, but as indicated in the table above earnings from these businesses increased about 4.8% during the second quarter and 7.4% during the first six months [...] Premiums written [by Geico] in the second quarter and first six months of 2013 were $4,548 million and $9,389 million, respectively, representing increases of 11.7% and 11.5%, respectively, compared to the corresponding 2012 periods. Premiums earned in the second quarter and first six months of 2013 increased $465 million (11.3%) and $848 million (10.4%), respectively, compared to premiums earned in the corresponding 2012 periods. The growth in premiums earned for voluntary auto was 10.4%, reflecting an increase in policies-in-force of 8.2% over the past year, and to a lesser d
Top Insurance Stocks To Buy Right Now: Prudential Financial Inc (PRH)
Prudential Financial, Inc. (Prudential Financial) is a financial services company. Prudential Financial has operations in the United States, Asia, Europe and Latin America. Through its subsidiaries and affiliates, the Company offers an array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. It offers these products and services to individual and institutional customers through proprietary and third party distribution networks. Prudential Financial has two businesses: the Financial Services Businesses and the Closed Block Business. The Financial Services Businesses consists of its United States Retirement Solutions and Investment Management division, United States Individual Life and Group Insurance division, and International Insurance division, as well as its Corporate and Other operations. The Closed Block Business consists of the assets and related liabilities of the Closed Block described below and certain related assets and liabilities. On January 1, 2012, it merged with Gibraltar Life Insurance Company, Ltd (Gibraltar Life).
On February 1, 2011, Prudential Financial completed the acquisition from American International Group, Inc. (AIG), of AIG Star Life Insurance Co., Ltd. (Star), AIG Edison Life Insurance Company (Edison), and certain other AIG subsidiaries. In July 2011, it sold its global commodities business to Jefferies Group, Inc. In November 2011, it acquired an office building located in downtown Chicago's Central Loop. On December 06, 2011, the Company announced the sale of Prudential Real Estate and Relocation Services (PRERS), the Company's real estate brokerage and relocation services unit, to Brookfield Residential Property Services.
Financial Services Businesses
The Financial Services Businesses consist of three operating divisions, which together encompass six segments, and its Corporate and Other operations. The United States Retirement Solutions an! d Investment Management division consists of its Individual Annuities, Retirement and Asset Management segments. The United States Individual Life and Group Insurance division consists of its Individual Life and Group Insurance segments. The International Insurance division consists of its International Insurance segment. Its Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, as well as businesses that have been or will be divested.
The Individual Annuities segment manufactures and distributes individual variable and fixed annuity products, primarily to the United States market. The Company�� annuity products are distributed through a diverse group of independent financial planners, wirehouses, banks, and insurance agents, including Prudential Agents and the agency distribution force of The Allstate Corporation (Allstate). It offers variable annuities that provide its customers with tax-deferred asset accumulation together with a base death benefit and a suite of optional guaranteed death and living benefits. Its variable annuity investment options provide the customers with the opportunity to invest in proprietary and non-proprietary mutual funds, frequently under asset allocation programs, and fixed-rate accounts. The Company�� prudential agents distribute variable annuities with proprietary and non-proprietary investment options, as well as fixed annuities. Its individual annuity products are also offered through a range of third party channels, including independent brokers, wirehouses, banks, and Allstate�� proprietary distribution force.
The Company�� retirement segment, which is referred as Prudential Retirement, provides retirement investment and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors. Its full service business provides recordkeeping, plan administration, actuarial advisory services, tailored participant education and communicati! on servic! es, trustee services and institutional and retail investments. It services defined contribution, defined benefit and non-qualified plans. For participants leaving the clients��plans, it provides a range of rollover products through its broker-dealer, Prudential Investment Management Services LLC, its bank, Prudential Bank & Trust, FSB (PB&T), and certain of its insurance companies. Its institutional investment products business offers guaranteed investment contracts (GICs), funding agreements, institutional and retail notes, structured settlement annuities, and group annuities, for defined contribution plans, defined benefit plans, non-qualified plans, and individuals.
The Company�� full service business offers plan sponsors and their participants a range of products and services to assist in the delivery and administration of defined contribution, defined benefit, and non-qualified plans, including recordkeeping and administrative services, comprehensive investment offerings and consulting services to assist plan sponsors in managing fiduciary obligations. As part of its investment products, it offers a range of general and separate account stable value products and other fee-based separate accounts, as well as retail mutual funds and institutional funds advised by affiliated and non-affiliated investment managers.
It also offers fee-based separate account products, through which customer funds are held in a separate account, retail mutual funds, institutional funds, or a client-owned trust. These products generally pass all of the investment results to the customer. In addition, it offers guaranteed minimum withdrawal benefits associated with certain defined contribution accounts, and hedge certain of the related risks utilizing externally purchased hedging instruments. It also offers a range of rollover solutions, including individual retirement accounts, mutual funds, and guaranteed income products. Its rollover products and services are marketed to participants who ter! minate or! retire from organizations that are clients of its retirement plan recordkeeping services.
The Asset Management segment provides an array of investment management and advisory services by means of institutional portfolio management, mutual funds, asset securitization activity and other structured products, and strategic investments. These products and services are provided to the public and private marketplace, as well as its United States Individual Life and Group Insurance division, International Insurance division and Individual Annuities and Retirement segments, as well as the Closed Block Business. Its products and services include Public Fixed Income Asset Management, Public Equity Asset Management, Private Fixed Income Asset Management, Commercial Mortgage Origination and Servicing, Real Estate Asset Management, Strategic Investments, and Mutual Funds and Other Retail Services.
The public fixed income organization manages fixed income portfolios for United States and international, institutional and retail clients, as well as for its general account. Its products include traditional broad market fixed income strategies and single-sector strategies. It manages traditional asset-liability strategies, as well as customized asset-liability strategies. It also manages hedge strategies, as well as collateralized loan obligations. It also serves as a non-custodial securities lending agent. The public equity organization provides discretionary and non-discretionary asset management services to a range of clients. It manages an array of publicly-traded equity asset classes using various investment styles. The public equity organization is consisted of two wholly owned registered investment advisors, Jennison Associates LLC and Quantitative Management Associates LLC.
The private fixed income organization provides asset management services by investing in private placement investment grade debt, private placement below investment grade debt, and mezzanine debt securi! ties. The! se investment capabilities are utilized by its general account and institutional clients through direct advisory accounts, insurance company separate accounts, and private fund structures. The commercial mortgage operations provide mortgage origination, asset management and servicing for its general account, institutional clients, and government-sponsored entities, such as Fannie Mae, the Federal Housing Administration, and Freddie Mac. It also originated shorter-term interim loans for spread lending that are collateralized by assets generally under renovation or lease up
The global real estate organization provides asset management services for single-client and commingled private and public real estate portfolios and manufactures and manages a range of real estate investment vehicles investing in private and public real estate, primarily for institutional clients through 22 offices worldwide. Its domestic and international real estate investment vehicles range from fully diversified open-end funds to specialized closed-end funds that invest in specific types of properties or specific geographic regions or follow other specific investment strategies. The Company makes strategic investments to support the creation and management of funds offered to third-party investors in private and public real estate, fixed income and public equities asset classes. Other strategic investments are made with the intention to sell or syndicate to investors, including its general account, or for placement in funds and structured products that it offers and manages. It also makes loans to, and guarantees obligations of, the Company�� managed funds that are secured by equity commitments from investors or assets of the funds.
The Company manufactures, distributes and services investment management products primarily utilizing asset management expertise in the United States retail market. Its products are designed to be sold primarily by financial professionals, including both Prudential Agents an! d third p! arty advisors. It offers a family of retail investment products consisting of 41 mutual funds as of December 31, 2011. These products cover an array of investment styles and objectives designed to retain assets of individuals with varying objectives and to accommodate investors��changing financial needs. In addition, it offers banks and other financial services organizations a wealth management platform, which permits, such banks and organizations to provide their retail clients with services, including asset allocation, investment manager research and access, clearing, trading services, and performance reporting. The U.S. Individual Life and Group Insurance division conducts its business through the Individual Life and Group Insurance segments. Its Individual Life segment manufactures and distributes individual variable life, term life and universal life insurance products primarily to the U.S. mass middle, mass affluent and affluent markets. During 2011, its primary insurance products are variable life, term life and universal life and represent 41%, 49% and 9%, respectively, of its face amount of individual life insurance in force, net of reinsurance.
The Group Insurance segment manufactures and distributes a range of group life, long-term and short-term group disability, long-term care, and group corporate-, bank- and trust-owned life insurance in the United States primarily to institutional clients for use in connection with employee and membership benefits plans. Group Insurance also sells accidental death and dismemberment, preferred provider and indemnity dental and other ancillary coverages, and provides plan administrative services in connection with its insurance coverages. It offers group life insurance products, including employer-pay (basic) and employee-pay (voluntary) coverages. This portfolio of products includes basic and supplemental term life insurance for employees, optional term life insurance for dependents of employees and group universal life insurance. It also of! fers grou! p variable universal life insurance, basic and voluntary accidental death and dismemberment insurance and business travel accident insurance. It also offers a living benefits option that allows insureds that are diagnosed with a terminal illness to receive a portion of their life insurance benefit upon diagnosis, in advance of death, to use as needed.
The Company�� International Insurance segment manufactures and distributes individual life insurance, retirement and related products, including certain health products with fixed benefits. It provides these products to the broad middle income market across Japan through multiple distribution channels, including Life Advisors, who are associated with its Gibraltar Life operations. It also provides similar products to the mass affluent and affluent markets in Japan, Korea and other countries outside the United States through its Life Planner operations. It also offers variable life products in Japan, Korea, Taiwan and Poland and interest-sensitive life products in all countries with the exception of Brazil and Mexico. In most of its operations, it also offers certain health products with fixed benefits, some of which include a high savings element. In addition, similar products are offered to the middle income market across Japan through Life Advisors, the distribution channel of the Company�� Gibraltar Life Insurance Company, Ltd. (Gibraltar Life) operation.
The Company�� international insurance operations offer various traditional whole life, term life, endowment policies, which provide for payment on the earlier of death or maturity and retirement income life insurance products that combine an insurance protection element similar to that of term life policies with a retirement income feature. It also offers variable life products in Japan, Korea, Taiwan and Poland and interest-sensitive life products in all countries. It also offers certain health products with fixed benefits, as well as annuity products, which are primari! ly repres! ented by United States and Australian dollar-denominated fixed annuities in its Gibraltar Life operations.
Closed Block Business
The Closed Block Business includes liabilities for its individual in participating products, together with assets that are used for the payment of benefits and policyholder dividends, expenses and taxes with respect to these products. The Closed Block is 90% reinsured, including 7% by a wholly owned subsidiary of Prudential Financial. During 2011, the Company also reinsured 90% of the short-term risks associated with the Closed Block policies to a wholly owned subsidiary of Prudential Financial.
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